This article originally appeared in Crain’s Detroit Business March 13, 2026.
Housing costs have spiked in Michigan. Rental and mortgage rates are higher than they were just a few years ago. A key reason for this increase in costs is that there isn’t enough supply to meet demand – builders aren’t able to build enough to keep up with what customers want.
There are competing bill packages to try and deal with this problem in Lansing. One package limits what local governments can prohibit through zoning. Municipalities would not be allowed to ban duplexes across most of their cities, mandate a high number of parking spots for apartment buildings, force homes to be built far back from the sidewalk, require repetitive studies or ban smaller homes or Accessory Dwelling Units.
An alternative package from the associations representing municipal governments wants the state to spend $800 million to encourage, but not require, zoning changes. They estimate this would result in 10,000 extra homes over five years.
But that package is unlikely to get the job down. 10,000 homes is a small fraction of the supply needed to bring down home costs. Further, subsidizing up to $100,000 per home is absurd. Michigan cannot subsidize its way to growth. We don’t have enough time or enough money to do so. It is good that this package would encourage zoning changes, but, as Michigan House Speaker Matt Hall suggested, why should municipalities have to be bribed to do what is right?
These bills may actually slow down housing construction in the state. Consider an apartment project in mid-Michigan, which has now taken eight years to get built. Why so long? Because of local government regulations and state subsidies. The project required a change in zoning (which took time), then permitting (which took time), then repeated community input (which took time). The developer then re-did the project to make it eligible for state money (which took time). If the developer had been allowed to build on that land by right, the project would have been built and been providing homes for people in the town years ago. But the same project took much longer and cost much more money (to the developer and state and local taxpayers).
Michigan needs to learn the lessons of other states. California allows strict local zoning and tries to solve its housing problems through large government subsidies. The result is sky-high housing costs, a large homeless population and people moving elsewhere.
Texas, Tennessee, Arkansas, Indiana and, now, Oregon, New Hampshire and Montana all have much less zoning, faster permitting and fewer regulations. Their housing costs are much more reasonable. They don’t buy their way out of the problem – they build their way out.
Limiting what local governments can zone is not a strange concept. It is done in all of the states mentioned above. And it is done in Michigan. State law allows cities to apply zoning to some things, but exempts many things from local regulation – instead regulating them at the state level. The state preempts or severely limits municipalities from zoning out agriculture, waste facilities, utilities, transmission lines, railroads, pipelines, energy production, schools, colleges and more.
Michigan law already regulates housing at the state level. Building codes, environmental laws, farming and home rentals are largely removed from the zoning code by state law.
Republicans and Democrats in Michigan understand this. Taxes, constitutional rights, freedom of movement, licensing – all limited by state laws. Why? Because issues vital to the state need to be dealt with at the state level.
And housing is vital. It is the budget item the typical family spends the most on every month. It determines where people can live, what access they have to jobs, how often they get to see their kids and grandkids. The average first-time homebuyer has gone from 31 years of age to 40 in the last decade, according to a survey from the National Association of Realtors, and the average buyer now has a household income of $95,000. (Other sources call this an overestimate and say the typical age is around 33.)
If this is not a crisis, it is at least alarming. Michigan lawmakers need to deal with it at the state level, as many other states do.
